Knorr Bremse (KBX), mcap=9.6bn eur, price eur59.0 vs eur68.3

Pitch: Manufacturer of braking systems for rail and commercial vehicles. Trades at lowest 8x fwd. EBITDA since 2018 IPO, below peers as well as recent transactions. Strong FCF generator through the cycle with 30%-45% in aftermarket/services sales. Newly appointed Chairman and to be appointed CEO are expected to revitalize the company. Rumors of a strategic break-up if shares continue to languish. Thiele family owns 59% of shares.

Valuation: KBX trades at 8x ’23 EV/EBITDA while comp WAB is at 12x. Another peer WABCO was taken out at 11.6x. SOTP valuation indicates eur100/share target.

Exp. gain: Exp. gain: +50% to eur100/share.

Full KBX write-up (free guest account required):

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